Answer:
11/01
Dr Notes Receivable 4,000,000
Cr Cash4,000,000
12/31
Dr Interest receivable 40,000
Cr Interest revenue 40,000
Explanation:
Preparation of the journal entry to Record the acceptance of the note and the appropriate adjustmentfor interest revenue at December 31, the end of the reporting period.
11/01
Dr Notes Receivable 4,000,000
Cr Cash 4,000,000
12/31
Dr Interest receivable40,000
Cr Interest revenue 40,000
Calculation for Interest Revenue using this formula
Interest Revenue =Face Amount *Interest Rate *Time Period
Let plug in the formula
Interest Revenue= 4,000,000 x .06 x 2/12
Interest Revenue = 40,000
